On September 1, 2021, a company lends $50,000 to a customer with 9% interest. The note and interest are due in twelve months. The note receivable is recorded for $50,000 on September 1, and the following year-end adjusting entry is made on December 31, 2021:

Debit - Interest Receivable 4,500

Credit - Interest Revenue 4,500

At the end of 2021, which of the following is true?

A) Revenues are understated.

B) Liabilities are understated.

C) Assets are overstated.

D) All amounts are accurately stated.

Answer: Assets are overstated.